Turning Your Attribution Model into Online Marketing Optimization

Series: How Smarter Attribution Leads to Smarter eCommerce Marketing

In our last blog posts, we explained the last-click attribution model and the customer journey attribution model. Last-click attribution gives credit only to the final marketing touch point before the transaction without acknowledging any “assisting” clicks. However, marketers invest in numerous online marketing channels and vendors, each of which plays a role on the path to conversion — so looking at only the last-click fails to give the full picture when it comes to measuring the success of your marketing investments. That is where the customer journey attribution model comes into play, a model that takes into account numerous marketing touch-points across the customer’s journey to conversion. Using this model, advertisers can assign some percentage of total credit to numerous channels in order to fine-tune their investments. Makes sense, doesn’t it?

No matter which attribution model you use, you will get some understanding of your return on investment for each channel. The next step is to learn how to use this knowledge to adjust your online spend. First of all, you need to define a consistent evaluation period for how often you will adjust your investments. We recommend adjusting your optimal cost-per-order (CPO) every two weeks, but this period might vary depending on the length of the sales cycle for your products. In any case, don’t try to adjust your CPO right away. Furthermore, after first setting up a new attribution model, we recommend that you wait four weeks before making adjustments, in order to collect substantive results to analyze.

Fine-Tuning Your Online Marketing Investments

To further refine your strategy, you could also consider sub-segmenting the CPO of a given channel for more precision. For example, you could assign CPOs on a vendor-, partner- or even keyword-level. How high are the costs from a given vendor, partner or keyword group in relation to the measured sales? Applying granular CPOs will help you find out. From our experience, this works best using a customer journey attribution model that weighs each vendor or partner based on its contribution to the sale.

As we’ve said before, attribution modeling can be easier to understand if you think of it like a sports game. A seasoned coach can tell you exactly when to put which player on the field in the first quarter, and when to make a swap. An intelligent attribution logic using smart accreditation tells you the exact same thing about online marketing: when to invest in which channel or vendor, and how to adjust your investments.

With all these options for precision and optimization, keep in mind that there will always be a difference in the CPO reported in the vendor/channel reporting and your own analytics reporting. Why is this? Simply because the vendor/channel reporting looks at the results from a single partner or channel, while the analytics reporting provides a comprehensive view of all channels.

Up Next: Sustainable Growth Through CLV Optimization

So you’ve settled on an attribution model and have a solid understanding of how to use it to adjust your investments? Great, but your attribution story is not over yet! To take optimization to the next level, stay tuned for our next blog post about how to look beyond the next transaction and optimize to the Customer Lifetime Value (CLV) – the Holy Grail of online marketing.